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What is Housing Finance Company?
The Housing Finance Company is a type of Non-Banking Financial Company (NBFC) which is engaged in the principal business of “Financing of acquisition or construction of houses”. Generally housing Finance Companies are those type of companies who have the main object of carrying business of providing finance for housing whether directly or indirectly. They are regulated by the National Housing Bank (NHB).
What is the objective of Small Finance Banks?
Its primary purpose is to provide institutional mechanism for promoting rural and semi urban savings to the people of rural areas.
Supply of credits to small business units, small and marginal farmers, micro and small industries, and other unorganized sector entity, through high technology- low cost operations.
Regulatory Authority For Housing Finance Company
In the Housing Finance Sector, NBH plays a vital role. To maintain credibility and stability in terms of resource development, policy development and institution building of the housing Finance sector in the country, NHB placed an effective system of responsive regulation.
For Housing Finance Companies, NHB has come up with a set of guidelines in terms of -
1.Financial Assistance
2.Prudential Norms for income recognition
3.Asset classification
4.Regulating deposits taking activity etc.
To materialize this sector there is a requirement of synchronization between the Government, the Reserve Bank of India (RBI) and National Housing Bank (NHB)
1.RBI Regulates - Lending to the housing banks
2.NH regulates- Lending to the Housing by HFCs.
For Housing Finance Companies, NHB has come up with a set of guidelines in terms of -
1.Financial Assistance
2.Prudential Norms for income recognition
3.Asset classification
4.Regulating deposits taking activity etc.
To materialize this sector there is a requirement of synchronization between the Government, the Reserve Bank of India (RBI) and National Housing Bank (NHB)
1.RBI Regulates - Lending to the housing banks
2.NH regulates- Lending to the Housing by HFCs.
FAQ
Common List Of Questioner That Our Customer Ask From Us -Solved !
What are the basic requirements for obtaining a Housing Finance Company License in India?
In India Housing Finance Company is regulated by National Housing Bank (NHB). in accordance with section 29A of the National Housing Bank Act, 1987, no HFC shall commence or carry on the business of a Housing Finance without meeting the following conditions-
1.A Companies must be registered under the companies Act, and who is willing to commence the business of a Housing Finance of a Community at large.
2.It must have the principal object of provif=ding housing loan or housing finance in any form either directly or indirectly.
3.There is a minimum requirement of minimum net owned fund of INR 10 Crore.
1.A Companies must be registered under the companies Act, and who is willing to commence the business of a Housing Finance of a Community at large.
2.It must have the principal object of provif=ding housing loan or housing finance in any form either directly or indirectly.
3.There is a minimum requirement of minimum net owned fund of INR 10 Crore.
What are the documents required to file an application for Housing Finance Company Registration?
1.Certified copy of MOA and AOA.
2.Demand Draft of Rs. 10,000/- in favour of NHB, New Delhi
3.Board Resolution specifying the objective of the company and authorization to file application before NHB.
4.Certificate by professional regarding meeting the criteria of minimum net owned fund of Rs. 10 Cores.
5.Business plan of the Company for the next three years.
6.Company profile
7.Business profile of MD/Directors/CEO etc.
8.Audited Financials for the last three years, if available.
9.Education and Experience certificate of Directors and Employees.
10.Certificate by professional regarding the source of the capital of the company.
11.Details of the company in which Directors/ Directors, associated.
What is the process of Housing Finance Company Registration?
For Housing Finance Company registration an applicant company has to submit a physical copy of the application (In duplicate) along with the necessary documents which are mentioned above to the head office of the “National Housing bank” along with the Demand Draft of Rs. 10,000/- in favour of National housing Bank payable at New Delhi.
HFCs are different from banks- How?
HFCs are different from Banks as HFCs cannot accept De,mand Deposits, HFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself, Deposit Insurance Facility of deposit insurance and credit guarantee corporation is not available to depositors of HFCs unlike Banks.
What are the Post incorporation Formality for Housing Finance Company ?
Once a Certificate of Registration is obtained, HFCs need to complete the following post incorporation formal;cities for smooth functioning-
1.Development of loan processes
2.Development of loan policies, including appraisals technique and tools.
3.Development of IT infrastructure
4.Board structure
5.Organizational Structure and Drafting of Policies.
6.Product Development
7.Legal Operations
8.NHB Regulatory and Compliance Requirements
9.Resource Mobilization
10.Credit Risk Management
11,Scoring Model
12.MIS Format
1.Development of loan processes
2.Development of loan policies, including appraisals technique and tools.
3.Development of IT infrastructure
4.Board structure
5.Organizational Structure and Drafting of Policies.
6.Product Development
7.Legal Operations
8.NHB Regulatory and Compliance Requirements
9.Resource Mobilization
10.Credit Risk Management
11,Scoring Model
12.MIS Format
Which authority Regulates Housing Finance Company in India?
In India HFCs are regulated by the National Housing Bank (NHB). NHB is wholly owned by RBI.
Can NBFCs accept deposits?
Only those NBFCs who are granted license or eligibility to accept deposits only those NBFCs can accept deposits. However it must not be a Demand Deposit.
With whom appeal lies in in case of rejection/ cancellation of the certificate of Registration by NHB?
Yes, an appeal can be filed with the central government within 30 days of the order of rejection or cancellation of the certificate of registration.
